High Cost Of Malpractice Insurance

Dr. Paul Tudder figures he's delivered about 4,000 babies in 21 years, and in that time, he's never been sued.

Yet, as CBS News Correspondent Sharyl Attkisson reports, his . His premium was $23,000 in 2002. Then it jumped to $47,000. This year, he got a quote for $84,000.

"It puts me on yearly notice," says Tudder. "This year I think we can survive, but next year I don't know."

The insurance industry claims all OB-GYNs are paying the price for what they call out-of-control malpractice awards, far beyond what victims deserve. They support limits on how much money victims can win in court.

"Medical malpractice costs are all about lawsuits, settlements and jury awards," says P.J. Crowley, an insurance industry representative.

But Joan Claybrook, of the Public Citizen Consumer Group, says that's not the case.

"But it's a great, easy excuse," she says.

Claybrook insists the rate hikes aren't about lawsuits but about the insurance industry making up for investment losses. Investments are their main source of income.

In fact, from 2001 to 2002 when many OB-GYNs saw their rates double, malpractice payouts to victims were actually on the decline.

But insurance companies were losing big on their investments.

"The insurance company does not want to explain how they set their premiums, so they divert public attention and blame it all on people who are injured and their lawyers," says Claybrook.

Insurers admit they've lost money on investments, but insist that's not behind the skyrocketing rates - it's the lawsuits, they say.

"To those who suggest that legal expenses have nothing to do with the costs of insurance or the costs of health care in our society - these people belong in the 'flat earth society,'" says Crowley.

Caught in the middle, Tudder just hopes someone will find a way to deliver lower insurance rates so he can keep delivering babies.

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